The scuttlebutt Tuesday was that Groupon has been trying to build its own data center but can't for very simple reasons: it can't afford to.
The proof on the former part of this speculation? This job ad Groupon placed for a senior manager in performance engineering. The latter half? Betabeat crunched some numbers and after posing them to an undisclosed source, determined that the group-buying giant just doesn't have the funds necessary to construct an infrastructure that ironically would help save it money.
"The company had $243.9 million in cash and equivalents at the end of September, compared with $465.6 million in accrued merchant payables, that is, the money they owed people who ran Groupon deals.
The company ended up raising $700 million, but according to a source familiar with its business, there still isn’t enough cash on hand to make critical structural improvements the company needs to grow. Groupon is shelling out millions every month on hosting costs, and paying a premium to third parties."
Although Groupon's story is now starting to sound like that of many rock stars of old, who somehow managed to be bankrupt despite signing a multi-million dollar contract and selling dillies of albums, one Wall Street analyst has another nickname for Groupon: "the Internet's overgrown toddler."
While this amount of scrutiny is possibly called for, this does all help explain why Groupon is dipping into pricier "deals." Tuesday's example of this is a "private cooking and dining experience" with celebrity chef Todd English for a paltry $25,000. Time to check under those couch cushions.
Oh, and finally, Groupon's stock right now is at $22.45.
David Wolinsky is a freelance writer and a lifelong Chicagoan. In addition to currently serving as an interviewer-writer for Adult Swim, he's also a columnist for EGM. He was the Chicago city editor for The Onion A.V. Club where he provided in-depth daily coverage of this city's bustling arts/entertainment scene for half a decade. When not playing video games for work he's thinking of dashing out to Chicago Diner, Pizano's, or Yummy Yummy. His first career aspirations were to be a game-show host.